State won't build offices

January 16, 1991|By William Thompson | William Thompson,Evening Sun Staff Jon Morgan contributed to this story.

The Schaefer administration has dropped plans to erect a new $90 million state office building in downtown Baltimore. Instead, the governor plans to propose to spend about $88 million to buy office space for government use over an extended period of time.

Gov. William Donald Schaefer decided not to go ahead with construction of a proposed 10- to 15-story building near the state's West Preston Street government complex because of the poor economy. According to sources, he will unveil his lease-back plan when his $330 million capital budget for 1992 is introduced to the legislature Monday.

The proposed $330 million capital budget is equal to last year's capital spending plan and is in line with recommendations offered last September by the Capital Debt Affordability Committee, a panel of key Schaefer administrators.

Sources said the governor's capital budget for fiscal 1992 contains none of the bricks-and-mortar centerpieces that were the focus of his first four years in office.

The budget includes about $53 million for construction of public schools -- kindergarten through 12th grade -- and proposes that an additional $43 million in revenue bonds be sold for higher education needs.

Another $8 million has been set aside for the state's community colleges, mostly for building maintenance.

And the plan calls for spending $2 million on preliminary design of a 160,000-square-foot addition to the 140,000-square-foot convention center in downtown Baltimore. The $2 million design money was recommended by the Baltimore Convention Center Authority, a panel Schaefer appointed last year to study the feasibility of expanding the convention center.

The expansion is expected to cost about $104 million and take another three years to complete, according to authority officials.

fund the lease-back office plan, Schaefer plans to ask the legislature to approve sales of $88 million in bonds. Under the proposal, a private investor would pay for construction of a building and the state would lease office space in it, with the intention of buying the property, perhaps over 20 or 30 years.

Traditionally, lease-back proposals have met opposition from lawmakers, who believe that such financial arrangements jeopardize the state's bond rating. On the other hand, proponents say, lease-back programs ultimately save taxpayers money because private investors can build more cheaply than ** the state.

State Comptroller Louis L. Goldstein and other state officials have long argued that in the long run it is cheaper for the state to own property than to rent it. A move to build a new state office building in Baltimore appeared to be gaining headway until the downturn in the economy forced officials to set the proposal aside.